Maturity Benefits
Term Insurance
  • Understanding Term Insurance with maturity benefits
  • Pros and cons of term Insurance with maturity benefits
  • Who should opt for this plan?
term insurance with maturity benefits
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Term Insurance With Maturity Benefits

A term insurance policy with maturity benefits is an insurance policy for a specific term or period of time. It helps cover expenses incurred by your loved ones in case of the policyholder's sudden demise but if the policyholder survives the term and the policy matures, he/she will get certain maturity benefits such as the return of premium paid towards the policy and many more features depending upon the policy you opt for.

Difference between pure term plans and term plans with maturity benefits.

A pure-term plan is the purest form of life insurance where the insurance company or the insurer offers life coverage for a set period of time. If the insured unfortunately dies during this period, the sum assured is paid to the nominee but if the insured survives the term, nothing would be paid to them. On the contrary, under term plans with maturity benefits or return of premium, the insured can avail benefits such as bonuses or refund of premiums.

How does term insurance with maturity benefits work?

A term plan with maturity benefits is nothing but a traditional term insurance plan with unique benefits. In majority of the cases, term insurance is paid out in case of an untimely death of the insured and if the person survives the specified time period no money is returned or given back to the insurance holder.

There are certain term insurances that offer maturity benefits, such as the term plan known as TROP i.e. Term Return Of Premium, wherein the policyholder is given an additional feature of return of premium. In TROP, if the insured survives the term, all the premiums (excluding GST) that the insured paid during the policy period are returned back to the insured at the time of maturity.

Who should avail this?

This TROP plan offers comprehensive coverage and is best for people looking for savings and protection. It encourages people who generally won’t buy a term plan thinking if they survive they will lose all the money paid towards the term insurance plan.

TROP is for people who think that having a term plan goes to waste if the insured survives the policy term. The return of premium feature in TROP makes it unique from the regular term insurance policies.

Since TROP offers such a feature, the premium that needs to be paid by the policyholder is comparatively higher than the pure term insurance. It will be suitable for those who can easily afford to pay the premiums on time to avail of this benefit.

Advantages

A term plan with maturity benefits has the following advantages:

  • The first and the major advantage is obviously the maturity benefit wherein once the policy matures and the insured survives the entire term, the insurance company refunds the premium amount that was paid against the policy.
  • The term insurance plan with maturity benefits like any other pure term plan covers the policyholder's life up to a specified period. If the person, unfortunately, dies during that period, the insurance company pays the sum assured to the nominee along with the accrued bonus, if any.
  • Term insurance including TROP has an option that lets the policyholder add in additional riders such as Disability riders, Critical illness etc.
  • Under term insurance with maturity benefits, a policyholder can get tax exemption on the premiums paid under Section 80C.

Disadvantages

While term insurance with maturity benefits such as term insurance with return of premium, has a lot of benefits, it also has certain disadvantages. The following are the disadvantages of this plan:

  • Term insurance with a return of premium has a higher premium that needs to be paid by the policyholder. Since the premium is returned once the policy matures and the insurance company demands a higher premium and gives additional assurance that the premium amount that was paid will be returned back to the policyholder once the policy matures and the policyholder outlives the term.
  • Under TROP, not everything is returned back. When we say that under this term plan the premiums are returned, it is essential to know that not everything would be given out to the policyholder as it is. There are certain things that are not included while returning the premium amount such as taxes that have been paid on the premiums. Then there are certain things that depend on which insurance company you are buying the insurance from. Some companies do not return rider premiums or additional underwriting premiums that are charged.
  • Term insurance with maturity benefits is not an investment option. If you are looking for an investment option, this is not it. Even if the policyholder outlives the term, the premium that he/she gets back is without interest and the amount is not adjusted for inflation.

Term Insurance Companies

Check and compare plans from 21 IRDAI-approved term insurance providers before purchasing a term plan.

Conclusion

Term insurance with maturity benefits does not just give you a death benefit but it also gives you a survival benefit which is not available in pure term insurance. This is a major advantage while opting for a policy, but it does have disadvantages as well. If you are someone who is looking for an investment aspect, it would be wise not to opt for this plan as there are a lot of other ways to multiply your money but if you are someone who can easily afford to pay the high premiums and think this plan suits you better, just go for it.

It is necessary to do a thorough research before opting for the policy. There are various policies available in the market that look like term insurance with maturity benefits but are actually not. PolicyX.com can help you compare and buy insurance which best fits your needs without having to physically go somewhere.

What Our Customers Have to Say

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Sanjeev

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May 20, 2024

SUD Life term plan truly stands out my expectations as I got SUD Life term plan along with additional riders at very affordable premiums.

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I am impresses with the hassle free and quick claim settlement process of SUD Life. Thanks to PolicyX who guided me to get my claim settled.

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I was looking for a term plan to secure the future of my family. So I contacted PolicyX and one of their representatives Mr. Vaibhav helped me choose SUD Life term plan.

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PolicyX’s dedicated support made renewing my Bandhan Life Insurance policy easy. I’m absolutely delighted with the service offered by PolicyX Insurance Advisor.

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Priyanshu Sharma

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I bought a Bandhan Life Insurance through PolicyX, and I must say the level of communication and assistance I have received has been truly impressive.

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Yash Tomar

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May 17, 2024

After getting advice from the PolicyX experts, I chose a Bandhan Life Insurance term plan. Thank you, PolicyX, for helping me buy a term plan at such a low premium.

Naval Goel

Reviewed By: Naval Goel

Naval Goel is the CEO & founder of PolicyX.com. Naval has an expertise in the insurance sector and has professional experience of more than a decade in the Industry and has worked in companies like AIG, New York doing valuation of insurance subsidiaries. He is also an Associate Member of the Indian Institute of Insurance, Pune. He has been authorized by IRDAI to act as a Principal Officer of PolicyX.com Insurance Web Aggregator.